Review of arrangements for a large DC Plan

Case Study

Cosan Consulting were appointed by the Trustees of a large DC scheme (45,000 members) to carry out a review of the pensions administration service delivered by their administration provider. The Trustees had a number of concerns regarding service delivery and performance which led to the review of the whole service provision.

The key concerns were:

  • Errors in some areas of administration (mainly project related)
  • Planning, control, deployment and the robustness of the administration
  • Problematic extraction of accurate management information
  • Incorrect charging from members accounts
  • Low member engagement
  • A perception that fees were high and could increase as contribution rates increase
  • A lack of pro-active client management from the provider
  • An uncertainty on the future direction of service delivery/strategy from the provider
  • Concern with regard to the technology platform and strategy

The initial phase of our project was to build a clear picture of our client’s requirements and expectations. We achieved this through a number of facilitated sessions with all stakeholders (Trustee, Sponsor and Pensions Department). Once we had built and documented a complete picture, we presented this back to ensure complete ‘buy in’ from all concerned.

The next stage was to conduct a gap analysis with the Provider and to share with them their client’s expectations of the service. The purpose of this exercise was;

  • To compare what the Provider thought the client expected versus what in fact they really wanted
  • To assess the level of ‘fit’ between the two
  • To assess the Provider capability to deliver against the Client’s expectations & requirements
  • To identify areas where the Provider solution needed enhancement in order to be able to deliver against the Client’s expectations

Our review included two site visits to the provider plus subsequent follow up discussions and email exchanges. Our meetings included all the areas of the service delivery team, plus the senior management team, to understand the longer term strategic goals of the organisation. In addition, we covered aspects of the service delivery where the client themselves could introduce change to improve process flows and working practices.

Our initial observations were that whilst there were a number of areas where service delivery and performance could be improved, there was no evidence to suggest that there was anything fundamentally ‘broken’ in terms of the way in which administration was delivered.

Based on our findings, we recommended that the Trustees objectives would be best served by committing to a joint service development roadmap with the provider rather than by conducting a wider market review. Any market review can be costly and time consuming and ultimately may not guarantee that client requirements are fully achieved.

Our role was to understand the problem, establish the cause and find the relevant solution. We worked in collaboration with both parties to explain and educate on the risks associated with each problem and oversee the creation of a plan to implement the agreed improvements and changes.

Having conducted our research, we prepared a comprehensive report for the Trustees detailing our suggestions for remedial action to improve ongoing administration. Our suggestions were rated to show priority order and level of complexity to resolve. It should also be noted that some of the solutions were based upon short term process/control improvements, some were medium term developments and others relied upon the implementation of a new technology platform to be fully implemented. It was through using our experience and knowledge that we were able to categorise as such, rather than just producing an unqualified/unrealistic “shopping list” of required actions.

We had to gain a good understanding of the Trustees views and objectives, plus current and future capability/capacity of the provider to determine the ratings appropriately to meet the Client requirements. We have included just a few examples of our suggestions at the end of this document.

We presented our report to the Trustees who accepted the decision to work with their current provider, rather than initiating a wider market review. This was dependant however on a plan of action being agreed to cover all the immediate, midterm and longer term developments required. Effectively Cosan created an 18 month plan of action and Service Development Roadmap that all parties were happy to commit to.

Cosan are currently engaged with the Trustees and the provider to put in place the most appropriate mechanisms to deliver the plan and Roadmap, and we now have an ongoing involvement in this based upon;

  • Our strong project management capability
  • The experience we have gained of both Trustee requirements and provider capability
  • Our experience of platform/scheme migrations
  • Our ability to provide ongoing governance and evidence that the service is evolving

We are able to provide references from our client based on the work completed to date and explaining why they are delighted with the results we have already achieved.

We would welcome the opportunity to discuss this with you further to see how we can help you achieve improved service and ultimately, better outcomes for your members.

About Cosan

Cosan Consulting was formed in February 2014 by Ian Bloxham and Philip Dickinson. Cosan was created after identifying a need in the pensions and wider Employee Benefits space to change and improve how clients were supported by their providers.

Cosan offer a range of services specifically designed to help clients optimise efficiencies, ranging from tactical projects to strategic change. Here are just a few examples of the services we can offer:

  • Full Governance services including Trustee services and Management Committee services

  • Project management

  • Administration performance optimisation

  • In-sourcing/outsourcing strategy and implementation

  • Platform transformation

  • Scheme design and implementation

  • Performance measurement design and implementation

  • Customer service and client relationship management strategies

We offer a ‘hands on’, pragmatic set of support services that integrate with clients circumstances, needs and objectives. We get involved in the detail, win over ‘hearts & minds’, take accountability and responsibility for measurable results.

CATEGORY

AREA

PRIORITY

COMPLEXITY

WORKSTREAM

TIMESCALE

Admin Team Review of SLAs for all member and scheme processing and compare against external market place. Consider introducing End to End measures for certain key processes to improve the member experience and internal control processes. M M 1 Short Term
Scheme Documentation Review the archiving set up and back up facilities for both the central drive and workflow tool to ensure historical evidence is retained and readily available. M M T1 Short Term
Outbound Member Communications Softcopy letters to be saved to FileNet to remove the need to back scan. This will improve efficiency. M L 1 Short Term
Data Quality Review all current projects running on interfaces and map these recommendations to the existing roadmap of change to ensure remedial actions are completed in a timely manner and prioritised according to criticality. M L 1 Short Term
Accounts Review of outstanding balances in the account to understand the nature of unclaimed amounts and implement changes to prevent this in the future as well as a review project to contact relevant parties and reduce balance. M L 1 Short Term
Governance Review and consolidate risk registers in line with the six principles for good workplace pensions to ensure good practice across the business M L 1 Short Term
Admin Team Review of hand off activity between teams and associated controls with a view to remove the dependency on hard copy paper trail handovers to increase control robustness. H M 2 Medium Term
Checking & Quality Sampling Review authorisation set up on system with a view to ensure compliance and remove the need for a wet signature. This will increase the efficiency of the team. M M 2 Medium Term
Checking and Quality Sampling Build checklists into workflow to improve controls and efficiency. L M 3 Long Term
Inbound member comms Review of reporting of informal cases to ensure these are being captured so 'the provider' can accurately report on all work volumes. L L 3 Long Term
Outbound member communications Review alternative methods of communication such as email, SMS alerts to support the traditional paper trail approach to communication to improve the member experience and help control costs of delivery. M M 3 Long Term
Member processes Review advantages of the pending functionality when used correctly to improve reporting and case tracking M L 3 Long Term
 
Case StudyLydia Walker